Random posts, ramblings and exercises in writing, by a translator

So today I casually checked my online bank statement as I obsessively do almost every day (aka “watching the grass grow”) and what do I notice? Why, a little gift for New Year’s, courtesy of Capital One!

I mentioned before that I expected another raise of my credit limit in about May 2013, but I miscalculated. Today (January 2015) I find myself with a glorious limit of $2,250! Wow! That came unexpected. So I went from $300 in May 2012 to $500 in November 2012 to $750 sometime towards the end of 2013 (probably November or December–I forgot to report on this!) to, now, $2,250. From $300 to $2,250 in 2.5 years is not bad!

What I find interesting–and symptomatic for the entire credit system–is that I’ve been spending tiny amounts (often no more than $10 per month, mostly on e-books and such) and that I, as a customer, obviously don’t need this kind of credit line. Yet they hand it out anyway, probably according to some algorithm, trying to tempt me into spending more. Having said that, I’ve been obsessively paying my bills in full and on time (as I usually do), so that will certainly help mark you as a reliable candidate. But still.

The good news, then, is that you just need to follow some simple rules for establishing credit, keeping it, and increasing it:

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Those of us who travel the world and feel at home anywhere frequently run into hoops someone is trying to make us jump through.

No, your medical degree is not accepted here. No, you can’t work here as a lawyer even if you take some classes to familiarize yourself with our [enter current country of residence] system. No, you can’t be a teacher either, for the same reason. Ok, maybe a substitute teacher at an hourly rate, barely making minimum wage. No, your driver’s license is not good here even though you’ve had a flawless record in every other country you ever lived. No, you don’t have credit. No, you can’t have credit. No, you can’t open a bank account unless you first deposit $10,000 in cash. Oh, yes, money-laundering (so make sure you can prove where that money came from). No, you can’t get a credit card even if you make it a prepaid one. And so on, and so on. We may start taking this personally, thinking it’s our gender, ethnicity, skin color, accent… But honestly? I think most of the time it’s just good old-fashioned bureaucracy at work.

Yesterday I ran into one of those hoops–this time curtesy of investment bank & financial services provider Charles Schwab.

Let me backtrack a little bit. In 2008 I joined Amazon in Luxembourg (Amazon’s European HQ). One of the perks of my contract were so-called RSUs: special stock options that were managed, you guessed it, by Charles Schwab Financial Advisors. I left Amazon about 18 months later but kept the account going because, you know, it was my account with my name and address on it. I moved to the States, always keeping the account, always updating it with my current address and contact details, and always with money in it. Four years later, in 2013, I returned to Europe and duly informed Schwab. No big deal, new address, fill out this W-8BEN, done. Or so I thought. In December that year they blocked my account. They didn’t inform me or anything: my access was simply blocked and I had to call them to find out what was going on. Turned out they needed proof of my identity, address, and various other forms of bureaucratic nonsense. Remember: I wasn’t a new, potentially risky customer. I’d been with them since 2008, they knew who I was, I had previously lived in Europe, I had money in the account etc. etc. Didn’t matter. I had to provide copies of passport, utility bills, bank statements from 2 different (non-Schwab) banks. Oh, and also? I couldn’t just black out my balance on those bank statements: they wanted to see it all. Privacy, anyone? Not only did I have to send it by fax; they also wanted the originals. As a good, responsible customer, I did as I was told.

Until Friday. Yet again, my account was blocked. I first thought that it had been hacked because my password wouldn’t work, but I even tried to reset it–no luck. So I called. Only to be told: Oh, I see, you work for Amazon. Well, Amazon have terminated their relationship with Schwab, and we’re going to need you to fill out this new form, you know, to convert your account to [insert nonsensical account name here]. It didn’t matter that I hadn’t worked for Amazon in several years. At least they sent the form via email so I didn’t need to wait around for a letter to arrive. But guess what? That form looked suspiciously like the form I had to fill out in December, complete with W-8BEN, asking for copies of passport, utility bills, bank statements…

I am so sick of this. Companies making customers jump through hoops because certain boxes need to be checked. Say about Amazon what you will, but they understand customer service. And you know what? I have a sneaking suspicion why they terminated their relationship with Schwab.

Needless to say, I sent Schwab a very nice email telling them that I will close my account if they can’t convert it using the information they already have. Let’s see who wins.

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Earlier today I received a request to translate an article from English into German.

The sender wrote from an AOL address and signed his email with his name and email address, which I thought was odd for a private customer. Also, who still uses AOL? Nevertheless, I sent him my per-word rate and requested a copy of the document, his full address (“for my invoice”), and advance payment–all of which I thought would discourage any pranksters. He replied a little later with a copy of the document. I did the word count and replied with my definite offer and suggested timeline. Throughout this entire process I had a funny feeling that I couldn’t quite place.

He accepted my offer and agreed to pay not 33% (as I’d asked) but 50% of the overall invoice in advance. He also asked for my mailing address and telephone number so he could arrange payment. This finally raised my suspicions enough to do a background check on him. After all, my telephone number is featured prominently on my website, and he told me he had found my email address there. So why not my telephone number?

First, I checked his name and address on http://www.whitepages.com and Google maps. He was not listed, but the street address seemed to exist. Ok, so maybe he likes his privacy.

Next, I checked the email headers of all three emails I had received. They all came from an AOL client (as per X-Mailer and Message-Id), and always from the same IP address. So far, so good. However, the odd thing out was the original IP address (X-Originating-IP), which according to the IP trackers (http://www.ip-adress.com/ip_tracer/ and https://ipdb.at/ip/) I used belongs to an ISP called “Deepak Mehta FIE”. I could not find a web presence for this supposed ISP (and surely every ISP has one); also, a quick Google search showed that it was located in the middle of a field in Kansas. Ok, maybe it was some kind of a VPN or anonymizing portal, but this was sure getting interesting.

Then, I took a look at the file itself. It was a Word document and looked otherwise legitimate, but when I checked the personal information it was stripped bare of meta information. I mean, completely bare! No date, no author, nothing. Now, I know people who are paranoid enough to do this to their files. But for a guy who was ready to send me a check and his private mailing address, this really looked fishy. I finally decided to copy a couple of lines from the document and paste them into Google. Turns out it was an exact copy of a Wikipedia article.

Should I just have copied the German version of the Wikipedia article, taken his payment, and run? A scam the scammer kind of a deal? Perhaps, but I decided to play it professional and politely turned down the project.

What I learned from wasting 2 hours writing my offer and doing research: trust your gut instinct. If it “smells” funny from the get go, it probably is!

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I know it says update in the title, but there really isn’t one. Over the past six weeks I’ve received several more offers from Discover and American Express, all of which I threw away. Interestingly, Amex is now offering me the Gold card–the Gold card that a few years ago was not that easy to get unless you spent significant amounts of money every month! Are they so desperate that they offer these to just about anyone? Or is the whole Gold card thing just a ploy; essentially the same card as the regular green card, only with a higher annual fee (“free in the first year”)?

I’m still hoping for Amazon to increase the gift card amount on their rewards card, but thus far it’s still $30. I guess the next step could be just any old store card, but I really like books more than anything (and Barnes & Noble only offer a $25 gift card with their branded Mastercard).

Finally, since I applied for my Capital One Mastercard in May of last year and since they’ve already raised my credit limit once, I expect I get another raise in May of this year. We’ll see!

PS I don’t know if anyone else has noticed this, but it’s interesting to me that all of the branded credit cards I have come across are Mastercard, never Visa. I remember a time when you almost couldn’t get a Mastercard (in France and Luxembourg, at least); it was Visa all the way. I guess they’ve been making bad business decisions… Looking at their stock evaluations (Visa share price, Mastercard share price), Mastercard is worth more than three times than Visa! But: both companies have more or less doubled their share price since 2011.

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Now that we’ve all figured out how the system works and how it wants to be gamed, we can use it to our advantage.

As mentioned, Capital One offered me an initial $300 credit line. For six months, I was very disciplined and regularly spent small-ish amounts, never exceeding a balance of $200. Remember, never get too close to your limit! I redirected some of my subscriptions (Kindle, Netflix) to it so there would be small and, most importantly, regular amounts. Also, I paid every balance always in full and always on time. Also very important! After six months they quietly raised my credit limit to $500. W00t! Still not much but at least I’m moving up. I’m guessing they will keep going up if I stick with it.

Now for my prepaid Amex. There is no way of “upgrading” this prepaid card to a real one; so much for that. So I just kept spending and reloading; I typically have a $100-$150 positive balance on it (no interest of course). It’s a bit of a pain because reloading takes several days–yeah, the money is gone from my bank account but Amex gets to play with it for a couple of days! Not cool. I also tried to contact Amex several times regarding a “real” card but every time I was referred to their general website where I could apply along with everyone else. So, I decided to give up on it. Keep in mind that you shouldn’t request too many cards at the same time or too frequently as this is negative for your credit.

Along with the $500 credit line from Capital One I started getting my first credit card solicitations. Never anything major, but I think I was offered the Discover card twice. With a $700 credit limit. Yeah, whatever.

Then, I applied for an Amazon Store Card in November–about 6 months into my experiment. To my surprise I was immediately accepted. And with a $1,400 credit line no less. So, I have started spending on that. I bet that after six months they will raise that limit, too.

And now for the big news… Today, 8 months into my experiment, I received an offer from Amex: for a real card (yep, the green one). I’m contemplating applying for it, but I have two good fires going right now (Capital One credit card, Amazon Store Card), so I wonder if I should. It’s free in the first year but $95 as of year two. Also, I want to apply for the Amazon Credit Card once they set their welcome gift back to $50 instead of currently $30. Don’t apply for too many things, remember!

I will report back 🙂

PS Oh, I should also mention that I requested my annual credit report from AnnualCreditReport.com in December, the only legit source. Alas, both Equifax and TransUnion screwed this one up: Apparently, if you haven’t been in the system long some random information pops up including on your verification questions, so both were inaccessible and hence completely useless. Plus, there is no point trying to correct it because it’s a system flaw. Experian was great, however, giving me full and accurate information. I didn’t request my score as it’s probably very low anyway, but I will request it later on this year.

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For a foreign national such as myself, and a self-employed one at that, it is extremely difficult to establish credit in the U.S.

I feel like being 18 all over again: with 20+ years of professional background I have the same credit history as a college student, i.e. none. And as I soon learned, having no credit is even worse than having bad credit. Can I get a credit card? No. A store card? No. Sign the lease on that new apartment? No. Not even my own bank, the one I’ve been banking with here in the U.S., the one I have a savings account with, deposit checks into, have my name on the contract with. No. What about a secure credit card? No. Prepaid credit card? No. Some banks might be happy to help you out if you’re in full-time employment and can show a steady paycheck. But what about us, this ever-growing number of young entrepreneurs, writers, translators, Generation Flux?

Let’s talk about the whole idea of credit for a little bit. In order to establish and, ultimatively, build credit, you have to prove that a) you don’t really need it, and b) that you’re somewhat irresponsible. Let me explain. I’ve had all the utility bills in my name for a while (electricity, gas, water): not included in your credit history. I attend graduate school, but instead of taking out a student loan I work and save money until I can pay for the next semester. Not included in your credit history. I rent because I can’t afford to buy but always pay my rent in full and on time. Not included in your credit history. None of these things matter for your credit score. The only thing that matters are credit cards, personal loans, and mortgages. You’re a responsible adult who prefers to not take out loans and uses cash, checks, or debit cards? Doesn’t matter because the system is broken. If it were up to me, bills such as electricity would be a big part of your credit history (this should also be easy enough to monitor). Someone who pays their rent and bills on time and in full, is someone I would consider credit-worthy. Someone who does not take out loans but instead has a savings account, is someone I would consider credit-worthy.

But enough of that. We know the system is broken. How do we game it and make it work to our advantage? Before the financial crisis it was pretty easy to apply for a credit card and thus get started on establishing credit. No longer. Here’s what’s working for me right now:

Apply for a credit card with Capital One. I had zero history with them, and still they offered me a credit card (not a prepaid, not a secured, but a proper credit card) with a $300 limit. That’ll do for starters, thank you! Once you’re spending and paying off, they will no doubt raise the limit.

Apply for a prepaid credit card with American Express. This won’t help to establish credit, but it’ll build history with American Express. Once you’re spending and paying off they will likely offer you a proper charge card, which will then count toward your credit score.

I was approved for both cards with no trouble; no proof of income or financial commitments necessary. The important part to remember is this:

Use the new credit card often: every time you buy groceries, every time you get gas, every time you shop on Amazon.com. The more transactions (even tiny ones), the better.

If you do have a limit (like my Capital One $300), do not exhaust it. Ever. Try to spend 50-75% 30-50% of the limit, but no more. This shows that you’re responsible about your spending limits.

Pay off the card on time and in full every single month.

I have only just started on this route, and I will be reporting back. Based on my experience from living in other countries and establishing a history there, it should take about six months or so for these companies to start trusting you. I’m counting on having a full American Express credit card within 12-18 months.

Once you have all that working and established (at least six months), try other small things, such as applying for a store card with a big brand store such as Macy’s, and take out a small personal loan that you don’t need and pay it off regularly. Personal loans are great for credit building. Don’t forget: you’re doing all of this not because you need the money but because you’re building a credit history. Don’t even think about being late on a payment.

Finally, check your credit score once a year to make sure you’re on the right track. There is only one authorized platform, which is https://www.annualcreditreport.com/cra/index.jsp and covers all three bigwigs: Experian, Equifax, and TransUnion. Good luck!

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Is it just me, or did Google just sneak in some toolbar changes? My custom toolbar still looks normal on Firefox, but in Internet Explorer 8 all my buttons are hidden, irrespective of whether or not I enable them. I logged out and in again, reinstalled the toolbar, reset all the settings, still the same. Hmm…